Interview on Sky News Live, Speers on Sunday, with David Speers

  • Transcript, E&OE
Topics: Trade relationship with China, the Regional Comprehensive Economic Partnership, Indonesia free trade agreement, upcoming AUSMIN talks, imprisoned Australian writer Yang Hengjun.
04 August 2019

David Speers: Now, as we've been mentioning over the pasthalf-hour or so, we've been aiming to get to the Trade Minister SimonBirmingham in Beijing. We've been unable to resolve some of the technicalissues in the studio end at Beijing. But I am very pleased to say that theMinister's joining us on the phone now. And thank you for bearing with us,Simon Birmingham.

You're there, of course, asI mentioned, for the wider trade negotiations for the 16-nation RegionalComprehensive Economic Partnership trade deal, a mega trade deal not includingthe United States. Could I ask though, along the way, the government werehopeful you would get a proper bilateral meeting with your counterpart. Didthat happen?

Simon Birmingham: Well, David, what I had was several opportunitiesfor discussion with both Mr Zhong Shan, the Trade and Commerce Minister here inChina, as well as Vice Minister Wang Shouwen. So we had opportunity to discussa number of different issues. Not the full formal sit-down across the table fora long period of time, but numerous opportunities as the 16 nations were aroundthe table, during breaks in discussions, to chat on the sidelines.

David Speers: Well, is that a little disappointing? And any wordon whether the Australian Prime Minister might be invited to China some timesoon?

Simon Birmingham: Well, David, I didn't talk about Prime Ministerialvisits. I am pleased to have received an invitation to return later this year.It's my intention to hopefully do that. This is, of course, a critical traderelationship between China and Australia. It's also a very strong one, anddespite some of the negative commentary our two-way trade remains at recordlevels, has seen continued growth in a number of categories. And certainly Iand my Ministerial counterparts here both expressed confidence in the ongoingstrength of that relationship when we spoke with one another.

David Speers: Notwithstanding that, you were seeking some answers asto why there have been delays in Australian coal getting through Chinese ports.Did you get any answers on this? Are you able to explain why Australian coal isbeing held up?

Simon Birmingham: My Chinese counterparts continue to state that thisis not a discriminatory practice, that it is applied in relation to additionalenvironmental checks across different products. I've asked them to try and workwith our authorities so that Australian business can better understand whatthose checks are, how they're being applied, so that we can ensure efficiencythere.

We can see some issuesparticular to thermal coal and we know that there may be some broader issues atplay when it comes to China seeking to manage the volumes of thermal coalcoming into the country. But we do want to try to get to the bottom of whetherit is about demand management or supply management side from China, whether itis in relation to environmental checks, and I've asked for us to have somefurther dialogue on that.

David Speers: So you're still not 100 per cent sure about whatthis is about, but suspect it may be China propping up its own coal industry?

Simon Birmingham: There are a number of factors that could be thereand that may be one of them, as well as, as I say, in terms of the actualamount of coal usage within China we see as also possibly a factor there. Sothere could be numerous factors influencing it. Overall, we still see hugevolumes coming through. Our iron ore exports are at record [indistinct] havebeen booming, which was noted by Chinese authorities in discussions with me. Wesee as well, in relation to coking coal, incredibly strong volumes. And ofcourse just recently we saw wine trade figures demonstrating that Australia isnow the single largest wine importer into China, outstripping even the French.

David Speers: Sure, but when China can simply pull these levers,say that it's environmental concerns and hold up Australian exports, would yousay that China plays fair when it comes to trade?

Simon Birmingham: China is a country where we have struck a reallystrong trade relationship, and yes certainly there are questions here thatwe're seeking to understand in terms of why there are some delays for someshipments coming into the country. But overall our relationship has seenphenomenal growth year-on-year for a sustained period of time, and to dwellsimply on the singular negative there, that there are some delays in someshipments, is really to overlook the fact that economically, and in a tradesense this relationship is very sound…

David Speers: But Minister, it's not just that. There are also theallegations when it comes to stealing intellectual property or commercialsecrets. Certainly that's Donald Trump's view. Is it a view you share?

Simon Birmingham: We have indicated, in terms of the US dispute withChina, there are some aspects of the US arguments that we share and that wewant to see further action on, and I publicly welcomed last year the commitmentfrom President Xi to take further steps in relation to intellectual propertyreform in China and to ensure further protections. And again, we have seen someimprovements in that area. To look at the wine trade, for example, there havebeen some significant legal actions taken by Chinese authorities over the lastcouple of years [indistinct] products and the like. They're the type of stepsthat we welcome, and we want to see continued development of China's economy,which also means continued modernisation of its laws to protect intellectualproperty and technology and the brands that come in as imports from othercountries.

David Speers: All right, well, clearly Donald Trump's still notimpressed. On Friday he's announced plans for further tariffs on another $440billion worth of Chinese goods. You said the other day this is disappointing.Can I ask, is it also a breach of world trade rules?

Simon Birmingham: China has launched certain actions in the WorldTrade Organisation in relation to earlier decisions by the US administration.This one is something that has been announced but not yet taken effect. Andthat is a matter for the WTO to determine. Our prime concern is the…

David Speers: What do you think though? Would it be a breach ofthose rules? You understand them pretty well.

Simon Birmingham: Well, the unilateral tariff actions is somethingthat we have not welcomed, and may well be. But that is something for theindependent processes need to determine, and to let them run their course…

David Speers: So this may well be a breach of WTO rules?

Simon Birmingham: It may be, David, but what is a bigger and moreimmediate concern is that it's having a negative impact in relation to globaltrade levels. What we've seen is that the growth in terms of world tradevolumes, which was growing in 2017 at 5.5 per cent, in 2018 at 3.9 per cent, isnow, according to the OECD, expected to be down to 2.1 per cent in 2019. That'sa significant drop, it's the lowest growth rate in global trade levels sincethe GFC, and what that is doing is having a dampening impact on the rate ofglobal economic growth, which is bad for jobs and business in China, in theUnited States, in Australia [indistinct].

David Speers: This meeting you've been there for, the 16-nationRegional Comprehensive Economic Partnership mega trade deal, it's called, wouldit allow, can I ask, more foreign workers from those countries the ability towork in Australia?

Simon Birmingham: No, this isn't an agreement that's going to createsome big new area of work rights or migration rights. This is an agreementfocused on economic cooperation and trade opportunities, and that's where we'regoing to keep it focused. It is a huge bloc, as you say, 16 countries, onethird of the world's GDP, close to half of the world's population. And ofcourse it's here in our Asian region, and this Asian region has beeneconomically the fastest growing and most dynamic region over recent decades,and this agreement is a wonderful chance to cement that continued dynamism andgrowth [indistinct].

David Speers: What's Australia willing to give, though? Is thePharmaceutical Benefits Scheme up for any negotiation?

Simon Birmingham: Absolutely not. So, Australia stands firm in ourprotection of the PBS, of our rights to be able to regulate in relation toenvironmental standards or health standards. Australia, of course, is arelatively open economy and we already have trade agreements in place with 14of the 15 other nations that we're negotiating with here. So the bigopportunity for us is certainly to have a regional trading agreement thatincludes India and would give us, for the first time, improved market accessconditions into India.

But in there are also hugeopportunities for Australian businesses through better rules of origin forproducts, which can allow them to better integrate into the value chains rightacross the Asian region. That's about allowing business to do deals with otherbusinesses where they collaborate [indistinct] which components each one makes,how they provide services, and making sure that overall this region is asproductive as possible, and therefore everybody is best able to export to therest of the world.

David Speers: And how are things going on some of the other freetrade deals, the individual free trade deals you've been pursuing? Indonesia'sone that's dragged on and on. Is that any closer to agreement?

Simon Birmingham: Well, no, the Indonesian agreement has been struckand signed between Indonesia and Australia. What's happened since theparliament resumed after the election is that it has been referred to the JointStanding Committee on Treaties. There's a required period that it sits beforethat committee. We expect that report to come back in October and then ourGovernment will move promptly to legislate that. You've got to understand whyis this important? Well, it's important because we've got Australia's export levelsat record volumes, a [indistinct] and that has helped to underpin jobs growthin Australia. And what would give the best certainty to the Indonesianagreement is for the Labor Party to be clear that they will support its passagethrough the parliament. And if that's the case then we can hopefully ensure itsentry into force before the end of this year.

David Speers: Can I ask you, just on a couple of other fronts, theAUSMIN talks are getting underway in Sydney between Australia and AmericanForeign and Defence Ministers. One of the issues they're discussing is whetherAustralia should join patrols in the Strait of Hormuz to protect commercialshipping there. From a trade perspective do you think it is important thatAustralia plays its role to protect trade through that stretch?

Simon Birmingham: I'm very conscious that our Foreign and DefenceMinisters will be sitting down with their US counterparts today and that thismay be a topic of conversation there. I think it's most appropriate for me tolet them comment on that today after those discussions happen live in Sydney,rather than me seek to comment from Beijing.

David Speers: Fair enough. Look, final one. You said, I thinkbefore, or when you arrived, that you would raise the case of Australian writerYang Hengjun. He's been detained for six months in Beijing, he's now in aBeijing prison, accused of endangering state security. Did you get a chance toraise this case of this Australian with anyone there?

Simon Birmingham: My conversations ended up being quite focused ontrade. What we did have the opportunity, though, was our Foreign MinisterMarise Payne meeting with her counterpart, State Counselor Wang Yi, in Bangkok,which happened at the same time as my meetings here in Beijing, and I know thatthey discussed consular cases. And of course our messaging remains consistentin that regard, that we are seeking fair and transparent application of lawsand treatment and, importantly, for him to be granted access to his legalrepresentatives.

David Speers: Okay, but to be clear, you say you didn't have achance to raise this case with anyone in Beijing while you were there as thefirst Minister since the election?

Simon Birmingham: My comments and ability to raise issues werefocused on those trade issues, such as the coal ones that we discussed before,and making sure that we get those underway. It was literally at the same timethat Foreign Minister Payne was meeting with her Chinese counterpart, so shewas able to raise those consular matters.

David Speers: Doesn't this come back to, I guess, where we began,the need for a more formal bilateral meeting, and indeed a leader-levelmeeting, to discuss these things, to get more answers even on the coal front,which you acknowledged you still don't have 100 per cent clarity on? Is therelationship still in a position where you're unable to get those sort ofmeetings that we need?

Simon Birmingham: Well, I hope that we can see a further dialogue anda two-way consultation and discussion that allows for us to work through all ofthese issues. I was pleased to receive the invitation to come back before theend of the year. We'll be working hard to make sure that happens and to makesure that we have as much dialogue there as possible. And it should be madeclear that, of course, it was between Minister Payne and State Councilor WangYi, a thorough discussion that they had, a formal meeting that happened inaddition to the dialogue they were having as part of the ASEAN meetings. Andthat's a good opportunity for them to have worked through a number of issuesgermane to their portfolios, and of course that's where consular cases sit. Andrightly, in my case, I was having discussions about trade issues and theeconomic relationship.

David Speers: Trade Minister Simon Birmingham, once again thankyou for bearing with us through the technical issues there. Appreciate yourtime joining us.

Simon Birmingham: Thanks, David.

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